Human Resource Management and Organizational Outcomes in the Modern Corporate environment - Thesis Example

Management in practice: Human Resource Management and organizational outcomes are positively correlated functions in the modern corporate environment Introduction Organizational management is defined as the four-function based approach to managing the work environment in a business organization. There are four functions that a manager has to perform in this environment. They are planning, leading, organizing and controlling or coordinating. Organizational leadership, culture and goals play a very significant role here. It’s common practice to construct contingency theoretical and conceptual management frameworks in controlled situations. Thus this framework would encompass a series of endogenous and exogenous variables such as management related conceptual paradigms – management process planning, Human Resource Management (HRM) function, leadership roles, work schedule preparation, quality management function, marketing planning and other related functions. The subsequent framework would engender a theoretically determined structure of aims thus bringing up and addressing related issues. HRM according to Armstrong “is the strategic and coherent approach to the management of an organization's most valued assets - the people working there who individually and collectively contribute to the achievement of the objectives of the business” (Armstrong, 2006). HRM involves such tasks as recruitment, training & development (T&D) of skills, employee relations, retention and motivation strategies, workplace culture and delegation of power, authority and responsibility. Analysis Cultural diversity of workforce in modern business organizations against the backdrop of globalization has attracted the attention of many researchers and analysts. Multicultural workforces in the context of the modern business organization have been studied with specific reference to international Human Resource Management (HRM) practices. Thus a far more strategic significance is assumed by its country-specific and organization-specific contexts than any other dimension (Silber, & Kearny, 2009). Against this backdrop the structural processes, international HR management practices, Multinational Companies (MNCs) and their cross border operations, cultural diversity of workforce, mergers & acquisitions (M&A), Training & Development (T&D) of staff, skills management, industrial or employee relations, gender related issues in multicultural organizational environments and a host of other issues that are applicable to international HRM environments’ have to be studied. However the scope of this analysis would be limited to the primary and immediate spheres of international HRM and multicultural workforce environments and their impact on the related outcomes. However, except for the diverse regulatory environments these two destinations have much more in common as far as the HRM practices and multicultural workforce are concerned. But nevertheless this paper would highlight the differences in a priori and a posteriori elements in international HRM practices (Grugulis, 2007). HRM function is much facilitated when scale of operations expands beyond a certain minimum level. New recruits could be trained and put on the full-time workforce with the added advantage of having a continuous supply of skilled labor for future growth. Training & Development of skills have been emphasized by management experts with a view to making use of extra space in a new setting. Environmental benefits apart a new setting would allow the management to employ new training methods. As a corollary of the above it must be noted that HRM practices in culturally diverse organizations pose a formidable challenge to the leader/manager. In such situations the manager’s rationality and circumspection matter to such an extent that the subsequent decisions to co-opt workers’ support for his measures would have not only to be rational but also articulate enough. The HR manager is just a functionary here since his instincts about training and development of employees’ skills invariably support the organizational outcome. However it cannot be denied that the manager’s concern for the long run organizational outcomes as against the short term would have a telling impact on the overall organizational goals. Theoretical intricacies apart there is also a highly dynamic correlation between value judgments and leadership role in the organizational context where HRM practices are concerned. HRM strategies are closely aligned with leadership roles that percolate down to the bottom-line of the organization. The typical organizations adopt similar strategically determined functional variant of HRM models that are basically culturally diverse and internationalist in nature. Cultural diversity of the workforce might act as a constraint on the HR manager’s freedom to form such opinions as value judgments that underlie management decisions (Lawler, & Hundley, 2008). Thus by implication the manager or the leader is less amenable to accept value judgments in his decisions. This a priori factor has been cited by some scholars as a basic tenet that causes the schism between more culturally diverse HRM practices and less culturally diverse HRM practices. Strategic management principles require the organization to put in place a number of initiatives such as design, planning and implementation strategies. The corporate environment demands attention be paid to such variables as internal quality management, Human Resource Management (HRM), internal value chain analysis, supply chain management, product portfolio development, product & marketing mix, market segmentation, event life cycle management, strategic product/customer/market orientation, a sound communication strategy and above all a competitor orientation strategy based on the firm’s ability on the following cultural diversity determined HRM environmental factors. A perceptual mapping process to achieve corporate and organizational goals is nothing new in the individual firm’s own strategic HRM operational environment. Thus the current dichotomy between strategic competitive environment and strategic operational environment is based on the organizational outcomes. The individual company in the domestic market of the economy is subject to a greater amount of competitive pressure than those firms which exclusively produce in order to sell in the world market or export physically. Thus the competitor orientation strategy of the MNCs is determined by the level of internal and external competition. Internal competition occurs in a variety of situations. MNCs and other organizations with culturally diverse workforce such as communication, banking & finance, transport, hotel accommodation, medical services, air lines and the food & beverage industry all would be geared to meet the new pressures created by this diversity. How best to meet this competitive pressure depends on the firm’s ability to absorb excess demand through capacity and value creation. Internal value chain management process of the firm decisively places some limitations on its ability to meet this extra demand. Therefore it’s the pricing policy, HRM and internal management culture that ultimately enable the firm to meet this demand successfully. If the attendant VRIO (value, rarity, inimitability and organization) framework is sound enough to enable the management of the company to withstand pressure and devise alternate plans to compete against rivals then there is the possibility of success. However, it’s the HRM function which occupies a very important place in the whole value chain management process. The MNCs and local SMEs have been careful enough not to strain their staff at each level of operations. On-the-job Training and Development of skills at the average organization with a multicultural workforce is oriented towards meeting international quality standards. Therefore strategic operational and competitive environments of such organizations are characterized by some strategic shifts away from the homogeneous cultural environments’ HRM practices (Nkomo, Fottler, & McAfee, 2007). The relationship between the manager and the subordinate has been brought into sharper focus here owing to the very important decisions involving HRM and above all the existence of a dichotomy between the theory and the HRM approaches shows that indisputably international HRM practices under cultural diversity have to be adopted in a variety of contexts. This is none so well borne out than by the fact that where there are international culturally diverse HRM practices in organizations there is a precise tendency to define HRM strategy in keeping with long term organizational goals. This is in sharp contrast to the inefficiencies associated with less culturally diverse workforces elsewhere where organizational outcomes and goals tend to be synonymous with inward looking local practices. The leadership style plays a much more pivotal role here. The transformational leader motivates his followers by setting an example to his subordinates. However transformational leadership style isn’t always typical of such HRM environments. In the first place the democratic and transformational leadership qualities when combined together would ignore such overriding concerns for meeting production targets so that it would instill a sense of permanency in the minds of employees thus reducing absenteeism and redundancy. HRM function also has other areas for consideration when the firm expands as a result of M&A. Mergers and acquisitions produce HR synergies across a broader spectrum of departments or divisions within the combined organization. However M&A necessarily doesn’t mean that there would be an expansion in the scale of operations because the dominant company would simply strip the assets of the acquired company and absorb the latter’s market share. Such synergies in turn enable the new management to diversify and target hitherto unsought market segments. This type of expertise comes from the combined efforts. Multicultural workforce in the modern business organization against the backdrop of globalization has assumed such an important dimension (Drucker, 1999). MNCs haven’t been much different in this respect except in their geographical locations and size. In the first place MNCs has been known for such international HRM practices in multicultural workforce environments for a number of decades while the historical record of diverse organizations has been multicultural ever since it was the preferred destination for many Commonwealth citizens. Though this last characteristic has changed its organizational HRM environment has come to be identified with one of the most diverse in the world on par with the American society. Therefore it must be noted that MNCs have been much more focused on HRM practices of a very culturally diverse nature (Monir, 1998). In fact further culturally diverse organizations are known for its international HRM practices in a relatively most sectors. Cultural diversity in workforce is near universal spreading into many relatively modern sectors including ICT. MNCs stand out as the typical society where international HRM practices have acquired a truly international dimension. This doesn’t mean that MNCs has much less culturally diverse workforce in its organizations. In fact cultural diversity is marked by a tendency on the part of the management which is to look for what’s known as “cultural fits”. A demotivated workforce might underperform and then cause conflicts in the workplace. This is apparent in some organizational settings where persistently underperforming staff come to be treated as a liability by the management. Such friction between the manger and employees in culturally diverse organizational settings would be regarded as one of the most negative factors in falling productivity in organizations where mangers tend to be autocratic and diverge from norms. In other words human potentials have to be recognized before they are rewarded. The transformational leader does recognize these positive elements in the culturally diverse workforce. Such leadership qualities have a positive cumulative impact on the long term organizational outcomes (Ulrich, 1996). Therefore what’s essentially noticed in an international strategic HRM environment that functions basically with a highly regulated work environment while democratic leadership norms persist even beyond the work environment and sometimes extend up to otherwise indeterminate culturally diverse social settings. This last aspect of the modern society has acquired a much greater dimension of workplace based norms. Primary research analysis The following analysis is based on the primary research carried out by this writer. It includes a questionnaire given out to 20 management executives in private firms and a survey carried out among a 10 HRM executives including managers in London. The analysis is based on the relevance and scope of HRM related practices particularly being increasingly adopted by big business organizations in Europe. 1. Questionnaire and survey The sample population for the questionnaire was 20 chosen from four organizations in area in London. Roughly 5 staff members from each organization were chosen for the questionnaire. Their responses were recorded on the given questionnaire itself on the spot with little or no regressive action. While this researcher did not make close observations on the behaviors of respondents while filling the questionnaire there was a greater degree of positive response to the effort. The primary task of the researcher was to identify the degree of convergence among respondents to the existing HRM related outcomes. Despite the fact that almost 70% of the respondents to the questionnaire and 80% of the respondents to the survey were aware of the existence of HRM initiatives and policies at these restaurants, a very few of them were aware of the technical details of employee retention strategies, redundancy problems and motivation policies at respective organizations. Both the respondents to the questionnaire and the interviewees of the survey have had little or no time for interaction except in quality improvement related study circles. Invariably these responses were influenced by the perceptive capabilities of the individual respondents. As a result both the questionnaire results and the survey results were partially influenced by some biases and prejudices. Therefore this researcher allowed a margin of error ranging between + 0.2 to -0.2 so that the research outcomes have been basically determined within appropriate limits. The theoretical and conceptual framework of analysis was also determined by perception-based outcomes. The age factor was ruled out because many of the staff are young and below 35. Most of the employees’ responses that particularly concern the organizational environment and HRM related policies and initiatives have been affected by the progressive improvement of employees. Further employee retention and motivation strategies and labor turnover figures are interconnected in such a way that employees have particularly been affected by a lack of concern for their negative experiences while dealing with customers. Theoretically this questionnaire has clearly identified a positive set of outcomes related to HRM practices and motivation at business organizations. These theoretical outcomes are essentially associated with the practical environment as well. Thus the theoretical posture of the questionnaire analysis is based on the fact that international HRM practices have acquired a greater dimension of integrity at the inner-house operational level on par with positive employee motivation theoretical postulates (Frank, Finnegan, & Taylor, 2004). Indeed respondents felt the need for management styles that are more democratic in nature encourage communication strategies that require frequent feedback from lower level employees to the top management. Its communication flow from top-to-bottom and vice versa has been successful enough to generate some positive interest among employees in the successful management of the day-to-day affairs. For instance recruitment process is centered on fostering a dynamic value enhancing relationship with customers so that new recruits realize the organization’s philosophy of creating brand loyalty at the very beginning. Further employees responses that modern organizational approach is based on recruiting employees directly thus successfully adopting international HRM policies in relation to recruitment, training and retention of staff. They have agreed that this process inculcates organization’s own values in them. The respondents insisted that managers ought to have effective control over resources of the organization as an integral component through planning, organizing and leading. This questionnaire focuses attention on the resource base of an organization thus essentially focusing on the resource-based view of the organization and the connected VRIO analytical framework which depends on two assumptions – resource heterogeneity and resource immobility. Resource heterogeneity presupposes that each firm would possess a distinctly unique set of resources and connected capabilities thus giving it an advantage in cost over the rest of its rivals. Thus respondents stated that the modern manger’s task is much more complicated by Acquisition & Merger (A&M), thus effectively curtailing the degree of freedom enjoyed by rivals in copying its resources. These figures demonstrate the fact that resources are those inputs in the production process and they have some specific characteristics. For example capital equipment and labor skills of a company might not be identical to those of its rivals. The organization has a host of basic internal value chain elements that encompass its resources such as human capital, capital equipment, financial resources, technological capabilities, organizational achievements and economies of scale. Further the respondents identified that these are core competencies that the firm has built up over the years. Internal value chain management process is built on this success along with successful supply chain management. The manager’s ability to recognize the special uncopiable characteristics of the organization’s own resources would enable the organization to leverage its potion in the market or industry to its advantage. Indeed people as a resource base include all such as employees, suppliers, customers, creditors, competitors and so on. Almost all the respondents said that they had noticed employee relations or labor relations and HRM function have to be executed by the manager in such a manner that his management gals are compatible with organizational goals. The manager ought to have the kind of negotiating skills to deal with employees’ representatives such trade union leaders. In the performance of the HRM function the manager is not only a leader but also an executioner of strategy, i.e. the proper management of the HRM function depends on his personal skills. The ability to develop the hidden skills of his subordinates and to train them in the latest techniques matters as much as the ability to sustain the workforce at its peak level in competition against rivals matters. Many of the respondents felt that the internal communication strategy of the business organization with multicultural staff tends to be one oriented towards meeting the demands of a heterogeneous entity that defies all authentic environmental factors. Communication strategy within the organization has been the subject of many research papers because the multicultural workforce produces such a degree of linguistic divergence that communication has come to the center stage of the national debate. However, most respondents to the questionnaire said labor is a resource that has to be managed according to widely accepted international HRM practices. Big business organizations are subject to a variety of labor market influences such as supply and demand related outcomes in addition to the government’s national minimum wage policy. For instance workforce management capabilities can be theoretically examined according to the resource-based view of corporate strategy. Organizational success is determined by the internal strengths of the organization in controlling, rationalizing and utilizing the available resources to the maximum benefit of competitive advantage (Pieters, Gerald R Pieters (Author) 1. › Visit Amazon's Gerald R Pieters Page 2. Find all the books, read about the author, and more. 3. See search results for this author 4. Are you an author? Learn about Author Central & Young, 1999). Further according the respondents the well planned management of resources presupposes that each department would possess a distinctly unique set of resources and connected capabilities thus giving it an advantage in cost over its rivals. The ever increasing Research & Development (R&D) expenditure of Starbucks would confirm that resource variation is maintained by it in order to build up an inventory of inimitable resources. Thus according to the respondents knowledge on strategic skills development and workforce management principles require the organization to put in place a number of initiatives such as design, planning and implementation strategies. The corporate environment demands attention be paid to such variables as internal quality management, Human Resource Management (HRM), internal value chain analysis, supply chain management, product portfolio development, product & marketing mix, market segmentation, product lifecycle management, strategic product/customer/market orientation, a sound communication strategy and above all a competitor orientation strategy based on the firm’s ability on the following cultural diversity determined HRM environment (Legge, 2004). While employees might agree that perceptual mapping process to achieve corporate and organizational goals is nothing new in the individual firm’s own strategic HRM environment there is a vast discrepancy between organizational goals and HRM related outcomes. Thus the current dichotomy between strategic competitive environment and strategic operational environment is based on the organizational outcomes. The individual company in the retail sector of the economy is subject to a greater amount of competitive pressure than those firms which exclusively produce in order to sell in the domestic market or export physically. Thus the competitor orientation strategy of the firm is determined by the level of competition in the area. According to them competition occurs in a variety of situations. All organizations with culturally diverse workforce would be geared to meet the new pressures created by this diversity. How best to meet this competitive pressure depends on the firm’s ability to absorb excess demand through capacity and value creation. Internal value chain management process of the firm decisively places some limitations on its ability to meet this extra demand. Therefore it’s the pricing policy, HRM and internal management culture that ultimately enable the firm to meet this demand successfully. If the attendant VRIO (value, rarity, inimitability and organization) framework is sound enough to enable the management of the company to withstand pressure and devise alternate plans to compete against rivals then there is the possibility of success. However, almost all the respondents said that the HRM function which occupies a very important place in the whole value chain management process is determined by organizational culture to a greater extent. The big business organizations have been careful enough not to strain its staff at each level of operations. On-the-job Training and Development of skills at the average organization with a multicultural workforce is oriented towards meeting international quality standards. Strategic operational and competitive environments of such organizations are characterized by some strategic shifts away from the homogeneous cultural environments’ HRM practices. Given the responses to the questionnaire, many respondents were thinking of the emergent trend of competition and elaborate on how organizations would focus on learning and innovation to achieve strategic competencies against rivals. This analysis is essentially based on “the cognitive theory of the firm” and therefore places much emphasis on the organization’s ability to pass value judgments, to feel and experience emotions in functional management context. Thus many respondents agreed that the manager’s ability or inability to achieve organizational goals and success depends on his or her approach to resource management based on how internal organizational processes would determine capabilities to sustain a particular strategic initiative towards the achievement of the same goals. It’s difficult to make a realistic assessment as to what extent business organizations in the world as a whole have adopted these strategic labor management practices in order to maximize HRM related positive synergies at the practical level of the organization. The same can be said about their employee retention programs (Perkins, & Shortland, 2006). Only a few of them have adopted internationally reputed programs of retention while the rest have adopted a more mundane practice of retaining the highly skilled workers by paying more. Thus according to the respondents HRM practices and related CSR policy initiatives are virtually determined by a high level of dependence on organizational outcomes and not practical realties taking place on a daily basis. According to them particularly the environment and employee welfare related policies have shown a progressive improvement. In fact its place in the organizational environment of competition and marketing requires a much greater analytical focus in reference to its value creation within and without the organization. Its internal value chain management process has little parallel elsewhere within the industry. Similarly its external supply chain management process is perhaps one of the best in creating a systemic approach to managing supplier networks that are synonymous with product homogeneity and uniformity in organizational culture. This questionnaire focuses its attention on modern HRM practices which are inherently flawed and makes an effort to identify workplace discontent issues and their implications for organizational outcomes. Organizational outcomes or/and corporate goals need to be clearly defined in order to achieve HRM related benefits in the long term. Thus respondents said that management should have focused on the strategic HRM practices such as job enrichment and job enlargement rather than job rotation and job sharing. Manager’s inability to come to terms with employee motivation and communication interconnect would have been one of the biggest issues at some organizations despite the shorter and flatter management and organizational structures. This interconnect or link serves as a paradigm for the entire organization irrespective of its internal management and organizational structures’ efficacy. These figures demonstrate that the HRM philosophy was centered on a hybrid model of the time, i.e. a good admixture of performance-based incentives, people orientation and share ownership in the company would motivate the average employee to perform better. The former is directly related to the transactional leadership theory while the latter is linked to the then populist ideological concept of ‘share owning democracy’. Neither of them worked. For instance managers could have done better by creating proper channels of communication for continuous feedback of information, especially from the lower layers. Secondly employees could have been encouraged to take part in service ‘quality improvement circles’. People orientation is basically a concept associated with democratic organizational structure and management style. Thus this paper has successfully established a set of positive correlations between a number of CSR and HRM related key performance indicators and the organizational outcomes especially concerning employee skills reorientation and motivation strategies at modern organizations. Particularly the environment and employee welfare related policies have shown a progressive improvement. Conclusion It must be noted that the Human Resource Management of this nature has more constraints than otherwise would be possible. The limits are applied in order to make HRM practices more manageable and conveniently applicable in the organizational environment. The development of a theoretical and conceptual Human Resource Management requires a well controlled analytical framework of reference with the basis of variables as some integral parameter. In this instance the writer has made use of people resource, resources (material) and methods as the tripartite integral elements in the framework so that a comprehensive logical and theoretically sound framework could be developed. Such a framework of course has some limitations as the extensive controlling of the variables’ behavioral tendencies. In other words the variables are subject to some limitations that might hamper a free analysis. This is none so more apparent than in the international HRM practices being adopted to manage culturally diverse workforces. It had a very narrow outlook in managing its HRM function. I would inevitably focus attention on these modern HRM practices to align the inner organizational practices and structures with the current international trends in HRM. Next international HRM practices have an identical parallel despite the fact that organizations are in different regions. Therefore it must be noted that MNCs has been much more focused on HRM practices of a very culturally diverse nature. These differences apart further some organizations are known for its international HRM practices in a relatively few sectors only such as retailing and some services as ICT but in this cultural diversity in workforce is near universal spreading into many relatively modern sectors including ICT. In fact cultural diversity is marked by a tendency on the part of the management which is basically organizations to look for what’s known as “cultural fits”. REFERENCES 01. Armstrong, M 2006, A Handbook of Human Resource Management Practice, 10th edn, Kogan Page, London. 02. Drucker, PF 1999, Management Challenges for the 21st Century, Harper Paperbacks, New York. 03. Frank, FD, Finnegan, RP & Taylor, CR 2004, ‘The Race for Talent: Retaining and Engaging Workers in the 21st Century’, Human Resource Planning, vol. 27. 04. Grugulis, I 2007, Skill, Training and Human Resource Development: A Critical Text (Management, Work and Organizations), Palgrave Macmillan, Hampshire. 05. Lawler, JJ & Hundley, GS (ed.) 2008, The Global Diffusion of Human Resource Practices: Institutional and Cultural Limits, Volume 21 (Advances in International Management), JAI Press, Washington. 06. Legge, K 2004, Human Resource Management: Rhetorics and Realities (Anniversary ed.) Palgrave Macmillan, Basingstoke. 07. Monir, H 1998, The Management of a Multicultural Workforce, Wiley Publishers, New Jersey. 08. Nkomo, SM, Fottler, MD & McAfee, RB 2007, Human Resource Management Applications: Cases, Exercises, Incidents, and Skill Builders, 6th edn, South-Western College Pub, Kentucky. 09. Perkins, SJ Stephen J. Perkins (Author) › Visit Amazon's Stephen J. Perkins Page 5. Find all the books, read about the author, and more. 6. See search results for this author 7. Are you an author? Learn about Author Central 8. & Shortland, SM 2006, Strategic International Human Resource Management: Choices and Consequences in Multinational People Management, 2nd edn, Kogan Page, London. 10. Pieters, GRGerald R Pieters (Author) 9. › Visit Amazon's Gerald R Pieters Page 10. Find all the books, read about the author, and more. 11. See search results for this author 12. Are you an author? Learn about Author Central 13. & Young, DW 1999, The Ever Changing Organization: Creating the Capacity for Continuous Change, Learning, and Improvement, CRC, Florida. 11. Silber, K & Kearny, L 2009, Organizational Intelligence: A Guide to Understanding the Business of Your Organization for HR, Training, and Performance Consulting, Pfeiffer, San Francisco. 12. Ulrich, D 1996, Human Resource Champions: The next agenda for adding value and delivering results, Harvard Business School Press, Massachusetts. Appendix I Questionnaire 1. Please state your gender □ Male □ Female 2. How long have you been working at this organization? □ less than one year □ more than one year & less than 2 years □ more than two years but less than five years □ more than five years 3. What is your current position? □ Manager □ Assistant manager □ Executive □ Non-executive 4. Are you aware of any HRM policies and initiatives at this organization? If yes please specify. □ Yes □ No ……………………………………………………………………………………………………… ……………………………………………………………………………………………………… 5. Are you aware of any employee retention strategy at this organization? If yes please specify. □ Yes □ No ……………………………………………………………………………………………………… ……………………………………………………………………………………………………… 6. How would you rate the employee retention strategy, if any, on a scale of 1to10? □ between 1 to 3(the lowest) □ between 4 to 6 □ between 7 to 8 □ between 9-10(the highest) 7. How would you rate the success of all HRM polices and initiatives on a scale of 1 to 10? □ between 1 to 3(the lowest) □ between 4 to 6 □ between 7 to 8 □ between 9-10(the highest) 8. How do you assess the impact of HRM policies on employee motivation on a range of 10 points? □ 1to 4 □ 5 to 7 □ 8 to 10 9. Do you think that the management at this organization has been more concerned about promoting employee welfare policies? □ Yes □ No 10. Which of the following HRM initiatives have been noticed by you? □ motivation □ training & development □ compensation □ performance management □ health and safety □ any other(please specify)……………………. Appendix II Survey Questions Q. 1. What’s your perception of HRM polices and initiatives at your organizations? Q.2. Do you think that customers’ attitude towards employees has an impact on employee retention outcomes at this organization? Q.3. Do you think that employees at this organization are adequately prepared to meet customers’ contingency demands most of the time? Q.4. Have you ever complained against inefficiency of the staff to the management at this organization? Q.5. Do you think that your organization has initiated meaningful HRM policies to overcome these problem? Read More